The Pound Sterling (GBP) exchange rate could be in for an interesting week ahead. Given the state of recent Brexit negotiations, the Pound to Euro (GBP/EUR) currency pair could be particularly exciting to watch. Meanwhile, Sterling volatility against the US Dollar (GBP/USD) will also likely continue as markets enter risk-off mode.
Update: The Pound has begun the week on the front foot climbing by around 0.30% against the US Dollar (GBP/USD) and 0.20% versus the Euro (GBP/EUR). However, the climb is unimpressive considering Sterling’s recent dramatic fall. The Pound exchange rate took a beating last week after briefly hitting a two-month high versus the US Dollar. The Conservative Party conference is scheduled for next week, while the Labour Party’s is in full swing at the moment and seems to be closer to backing a second referendum. Politics are likely to be a major Sterling driver this week after Theresa May’s humiliation last week, so markets will be paying close attention to developments.
Pound (GBP) Exchange Rate Forecast: Can Carney Move Sterling Again?
The Pound could feel the impact of the Bank of England (BoE) next week with several central bankers due to speak. However, the main event will be BoE Governor Mark Carney’s speech on Thursday in Frankfurt. The Canadian central bank mogul has created significant Sterling fluctuations in recent months with his Brexit comments, and after Theresa May’s recent public disputes with the EU, he could do the same again. On the same day, BoE Chief Economist Andy Haldane is scheduled to speak; he’s another banker who’s capable of creating waves in money markets.
In terms of economic data, Wednesday will see the UK’s BBA Loans for House Purchase stats for August revealed, while Thursday will uncover the levels of UK Consumer Confidence in September. Friday will close the week with the final second quarter UK Gross Domestic Product (GDP) stat.
Euro Exchange Rate Forecast: Inflation Ahead
The Euro exchange rate is expected to experience some movement at the close of the week ahead with some highly influential ecostats making their way onto the market. Thursday will see the latest German Consumer Price Index (CPI) stat revealed, while Friday will detail levels of German Unemployment and Employment Change in September, followed by the Eurozone inflation reading for the same month. A fall in the Eurozone’s CPI could result in some EUR exchange rate weakness, while a rise could prove very beneficial for the common currency.
US Dollar (USD) Exchange Rate Predictions: Federal Change of Tune?
The US economy has posted some less than inspiring economic data of late, leading some to believe that the Federal Reserve may grow more cautious when it comes to hiking interest rates. Moreover, US President Donald Trump has voiced his own discomfort about the Federal Reserve’s recent rate hike path.
In the week ahead, Tuesday could inspire some market movement when the latest US Consumer Confidence reading makes its way onto the market. However, Wednesday might steal the show, when the US Federal Reserve makes its latest interest rate decision. Fed Chief Jerome Powell will hold a followup press conference, which could be another source of USD exchange rate movement.
Wednesday will continue with the Advance Goods Trade Balance, Durable Goods Orders, and second quarter US GDP figures. Friday will close the week with the August Personal Consumption Expenditure number.
During Friday’s European session, the GBP/EUR exchange rate was trending between levels of 1.1116 and 1.1268, while the GBP/USD currency pair resided between 1.3054 and 1.3276.